When you say fuzzy, do you mean it has lines through it?
Interlacing means that as the frame is refreshed on the screen only every other line is refreshed and then the alternate lines on the next refresh.
This is standard tv output, and as such your tv will be quite happy for you to feed this in and it will deal with it and it looks great on the screen. A pc and pc monitor is not built for interlaced output, it just shows what the codec tells it to show, which includes interlacing lines, especially in scenes with lots of movement.
It is also possible that the shutter speed on the camera was to slow for the amount of movement in the scenes. This will add motion blur and the interlacing will become more obvious.
If you are encoding to DVD to watch on the TV then the interlacing is no problem as that is what TVs n DVD players are happy with, just edit and see how it looks. if you are encoding to a PC/web based output(DivX,wmv,mov,etc), then make sure the encoder is set to de-interlace when you encode the final output.
Mike.
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Edius Pro, ADVC300
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